Neonatal intensive care units (NICU) have been shown to reduce neonatal mortality, specifically this has been shown for low birth weight infants (LBW) treated in Level III, high volume NICUs. Over the 1980s and 90s, there has been substantial growth in California of Level II NICUs with lower volumes of cases and no clear evidence of lower mortality rates. This study will examine the relationship between competitive factors (supply and demand for obstetrical hospital care, availability of paying patients, and penetration of managed care) and the growth of NICUs (levels II and III), their costs, and outcomes. The study will examine changes from 1980-1996 across 15 perinatal regions in California. The aims are to: (1) examine the role of competition among hospital for obstetrical patients on the availability of Level II and II+ NICUs, (2) determine the extent to which access to NICU care varies by, whether or not the mother is insured. and the source of insurance (Medical, private, managed care), (3) examine trends in rates of transfer from Level II and lower care hospitals to Level III for low and very low birth weight infants and the impact of growth of Level II NICUs on the probability of transfer, and (4) estimate the impact of growth on Level II NICUs on costs and neonatal mortality rates. The study will use data compiled by Ciaran Phibbs that links hospital discharge abstracts for infants with birth and death certificates.